Using dupli-faces changes the orientation of the child object
It looks like you can't avoid both problems:


The duplications follow the faces normals. So if you want them 90° you need to rotate the original object 90°.
The original objects is still visible in Solid mode. It won't be visible in Rendered mode though. If you want to make it more discrete you can scale it down, select the faces, and in the Duplication panel enable the Scale option, then adjust the Inherit Scale value.